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Thursday, February 4, 2016

KUWAIT: Kuwait retained its 74th rank globally in the latest economic freedom index released by the Heritage Foundation. Kuwait earned a score of 62.7 out of 100, putting it as a ‘moderately free’ country ahead of France, Saudi Arabia and Turkey, and with states like Poland, Belgium, and Spain in the same category. Kuwait made only a 0.2 improvement compared to last year’s index.

The 2016 Index of Economic Freedom indicates that despite efforts to modernize and diversify Kuwait’s economy, oil production remains dominant. The private sector is largely dependent on government spending and expatriate labor, and the labor market is highly segmented. The public sector employs about 80 percent of the labor force; expatriates are employed mostly in the small private sector.

Regarding rule of law, the report indicates that inadequate transparency in government spending and operations is exacerbated by the weak rule of law. “The legal system is not well developed, and foreigners face difficulties enforcing contract provisions in local courts. Only citizens of Gulf Cooperation Council countries may own land,” the report reads. Yet, it indicates that Kuwait saw improvement in freedom from corruption.

Income tax
The report further points out the fact that Kuwait does not tax individual income. “In practice, foreign-owned firms and joint ventures are the only businesses subject to the corporate income tax, which is a flat 15 percent,” the report reads. “Duties on international trade and transactions account for most other tax revenue.” And while the report indicates that government spending has dropped, it says that the spending equals 37.5 percent of GDP, and public debt is less than 10 percent of GDP. “Oil revenues allow tax rates to be kept low while maintaining government revenue,” the report reads.

With regards to regulatory efficiency, the report indicates that progress in regulatory reform has been gradual and uneven. “Bureaucratic hurdles add to the cost of completing licensing requirements,” the report says. “Labor regulations lack flexibility, and the labor market remains highly segmented. Reflecting the reality of long-term lower oil prices, the government has initiated a five-year (2015-2019) development plan to phase out Kuwait’s extensive system of subsidies, currently 9 percent of GDP.” In general, the index indicates that labor freedom in Kuwait has regressed, while business and monetary freedom has improved.

Trade freedom
mAs for trade, the report says that Kuwait’s average tariff rate is 3.9 percent. “Government procurement processes favor domestic firms,” the report says. “The government screens new foreign investment and restricts investment in some sectors of the economy. The financial sector continues to evolve. The number of non-performing loans is declining, and the banking sector remains well capitalized. The Capital Markets Authority took on a supervisory role in September 2011.” According to the index, trade freedom in Kuwait improved last year, while no similar improvements were seen in investment and financial freedom.

The index ranks Kuwait in sixth place among Arab countries, trailing Bahrain, the United Arab Emirates, Qatar, Jordan and Oman respectively. It argues that political tensions remain high, and economic policymaking has been constrained by political disputes. Kuwait controls roughly 6 percent of the world’s oil reserves. Oil and gas account for nearly 60 percent of GDP and 95 percent of export revenues

Tuesday, December 29, 2015

Abu Dhabi: Saqr Ghobash, Minister of Labour, has issued three ministerial decrees in an effort to enhance UAE labour market conditions and consolidate the contractual nature of labour relations.

The new rules, described by the minister as “a major milestone”, also seek to “close certain gaps pertaining to the enforcement and monitoring of labour relations, and provide for increased labour mobility in accordance with the provisions of our labour law”.

“I trust that these new decrees, together with the hard work ahead of us to improve our implementation and enforcement capacities, will translate into a qualitative leap in our quest to improve labour conditions in the UAE,” Ghobash said.

In an interview with Gulf News, Ghobash explained the new decrees, which come into affect in January 2016, and the impact they are expected to have on labour market conditions in the UAE.

Here is the transcript of the interview:

Over the last few years, you issued a number of decrees, understandably at varying intervals. Can you explain what motivates the Ministry of Labour (MoL) to introduce changes in the way it regulates the labour market?

Ghobash: Improving the administration of our labour market is a constant task. At times, it may only require enhancing our enforcement capacity or upgrading the arsenal of regulatory tools that are available to us; at other times, it may require the initiation and application of new policy initiatives that empower us to achieve newly-identified strategic objectives or, more broadly, improve labour market outcomes.

Less frequently, of course, we are called upon to amend our labour legislation, whether in response to key changes in labour market conditions or in order to align our legislation with international conventions that the UAE has ratified.

Policy making, in particular, is a cyclical process. It begins by identifying the key objectives of the proposed new policy, assessing our capacity to apply it, formulating it and then applying it once satisfied of the chances of its successful application. This is followed by monitoring its impact and adjusting it, if and when it becomes necessary.

One such policy initiative that we launched in early 2011 dealt with the rules and conditions for granting a new work permit to a foreign worker whose relation with a current employer has ended — commonly referred to as labour mobility rules. In our view, this had been a major policy initiative, the impact of which stood to significantly alter certain of our labour market’s outcomes.

The desired impact was two-fold: A positive change in key labour market indicators such as labour productivity, skill mix and access to skilled workers, and the enhancement of the protection that is extended to workers under the law.

Studies that we commissioned indicate that in the four years since this policy was introduced, tens of thousands of workers benefited from the new rules, increasing their earning potential by an average of 10 per cent.

Likewise, employers benefited from the new rules by way of increased access to more qualified workers at lesser administrative and recruitment costs.

Another impact had to do with the nature of labour relations: As employers were empowered to compete for skilled and qualified workers, and workers became more easily eligible to seek alternative employment that offers better conditions, the relation between employer and worker took a new dynamic; that of a contractual relation that is consensual and governed by the terms of the employment contract.

This is consistent with the provisions of our labour code.

The new ministerial decrees I am announcing today — three in all — are intended to build on the 2011 decree on mobility by seeking to further consolidate the contractual nature of labour relations, close certain gaps pertaining to the enforcement and monitoring of labour relations, and provide for increased labour mobility in accordance with the provisions of our labour law. They are concurrent and inter-related.

I am confident that these new decrees will prove to be a major milestone and have a significant impact here in the UAE and beyond.

You say these three new decrees are interrelated. Can you elaborate on that and explain the objectives they are intended to collectively achieve?

The underlying objective of these new decrees is, as I mentioned, to ascertain the contractual nature of the relation between employer and worker; one that is governed by the terms and conditions of employment that were freely agreed to by the two parties, is consummated and, eventually, terminated in accordance with the provisions of our labour code and regulation.

To do so, we needed to address several issues that are relevant to the contracting process and its transparency, to the sustenance of the relation after it is entered into, and to the manner it is lawfully terminated.

Upon termination, the conditions that govern the granting of a new work permit to the worker by the competent authorities needed to be made more flexible, building on the positive impact of the 2011 decree.

Let me begin with a set of guiding principles that influenced the drafting of these new decrees. The first principle is that an agreement to enter into an employment relation must be predicated on mutual, informed consent.

The second is that the duly registered contract is the ultimate reference in terms of the rights and obligations of each party.

The third is that an employment relation is strictly voluntary, that it can only continue on the basis of the free consent of each of the parties and can, thus, be terminated at any time by either party subject to mutually-agreed to conditions for termination.

Once an employment relation ends, the decision to grant or decline a new permit to the worker is confined to the relevant public authorities.

Accordingly, the first of the new decrees mandates that the worker be presented with a unified, standard, employment offer that contains clear and enforceable terms and conditions of employment, prior to the worker’s entry in the UAE.

The signed offer is to be filed with the MoL, then retrieved from MoL upon the worker’s arrival in the UAE and signed into a standard legal contract without substituting or altering the terms of the initial offer, unless the proposed alterations are accepted by the worker and MoL as enhancing the benefits to the worker.

The unified contract shall contain a termination clause that sets out mutually agreed-to conditions for early termination and asserts that neither party can be made to remain in the employment relation against their individual free will.

The second decree defines how a labour relation may be ended. It ends automatically at the end of the term of a limited-term contract if the contract is not renewed; it also ends by mutual consent or by one party acting to terminate it during the term of a limited-term contractor and in the case an unlimited open contract.

The key objective of this decree is to anticipate the various instances of termination and indicate if and what associated measures must be taken to ensure that termination is lawful.

Accordingly, a non-term contract may be ended by either party at any time subject to an agreed-to requirement of notification. The maximum term for limited-term contracts — and their renewal — is now set at two years; a relation that is subject to a fixed-term contract is automatically terminated at the end of the term of the contract unless it is renewed by mutual consent.

It may be terminated during the term of the contract, either by the mutual consent of both parties without further obligation by either of the two parties, or by one party acting unilaterally to terminate the relation subject to agreed-to requirements of notification and indemnification.

The third decree seeks to make mobility rules more flexible within the bounds of our labour legislation. A worker is eligible to obtain a new work permit in many instances of termination. Hence the worker is eligible when a term contract ends and is not renewed, and when a term contract is terminated early by the employer provided the worker is in compliance with the contract and has completed at least the first six months with the employer.

This six-month minimum period is waived for workers that are classified in skill levels 1, 2 and 3 in accordance with MoL classification.

A worker is also eligible to obtain a new work permit when the worker follows due process in terminating a renewed fixed-term contract, or a non-term contract, provided, in the latter case, the worker has completed the six-month minimum period of employment.

A worker is eligible to obtain a new work permit, irrespective of the time spent with the employer, when termination is caused by the employer’s failure to meet contractual obligations.

Thus, in effect, a worker is denied a new work permit when the said worker acts to unilaterally terminate the employment relation with a compliant employer during the term of the contract and when the worker fails to otherwise terminate the employment relation without following due process.

How does the Kafala (sponsorship) system come into play in all of this?

Kafala is an admission policy that controls the admission of and the granting of residency in the UAE to foreign nationals.

It mandates that foreigners who seek gainful employment in the UAE should first secure an employment contract with a UAE national entity or person, for the most part a UAE-registered business entity, as a precondition for obtaining an entry visa and becoming eligible for lawful residency in the UAE.

As such, Kafala is not unique to the UAE, or the GCC [Gulf Cooperation Council] countries for that matter.

What may distinguish the UAE and fellow GCC countries in this regard is that, unlike other countries that administer similar employment-related temporary residence programmes in parallel with other admission schemes, including permanent residency schemes or programmes that offer paths to permanent residency, the UAE immigration code does not provide for such alternative programs.

It is worth noting here that the formulation of a state’s admission policy is the sovereign prerogative of its national government.

Having said this, once a foreign national secures residency in the UAE for the purpose of employment, the relation that he or she enters into with the sponsoring UAE employer is an employment (labour) relation that is regulated by the UAE Federal Labour Law.

This de-linkage of the sponsoring relation, that secures lawful entry and residency in the country, and the labour relation, that is governed by labour legislation and the terms of the employment contract, is essential to the promotion of healthy and productive relations between employer and worker that are predicated on voluntary engagement, trust and the right of either party to opt out of the relation.

The new decrees seek to accomplish this very purpose of ensuring that, as per the provisions of our laws, labour performed by the worker under the contract begins, and continues to be strictly voluntary and consensual throughout the employment relation.

How do you see the impact of the new regulation in terms of extending protection to foreign workers in the UAE?

The new decrees extend further protection in a number of ways.

To begin with, ensuring the transparency of the contracting process shields the worker from the risk of accepting an employment offer without being fully informed of and consenting to its terms and conditions, on the one hand, and from the unscrupulous practice of contract substitution, on the other.

Ascertaining the contractual foundation of a labour relation and monitoring the relation on this basis ensures that, at any given time during the relation, it shall take the consent of both parties to continue the relation, but the decision of only one of the parties to terminate it; this mitigates against involuntary labour when the worker concludes.

Of course, there remain checks and balances in terms of what measures must be taken by the terminating party in order for the termination to be lawful, but the key point here is that a labour relation, any labour relation can be ended at any time.

Finally, more flexible mobility rules empower workers in the sense that a worker who accumulate skills and competencies on the job can aspire to transition into a more suitable employment opportunity either when the term of the contract expires or during the course of the contract term if certain conditions are met.

We believe that mobility is, in fact, empowering to both workers and employers.

There are as you know some concerns raised by some international organisations with regard to labour market conditions in the UAE. Will the new decrees address those concerns?

Let me answer your question by first pointing out that what motivates us in our pursuit of a more rational, more equitable and more stable labour market is our commitment to our Constitution, to enforcing of our own laws and to meeting our obligations under international law.

UAE Constitution stipulates that we “formulate labour legislation that upholds the rights of workers and the interests of employers by emulating advanced legislation elsewhere in the world”.

Article (40) of our Constitution goes on to assert that foreign nationals residing in the Union “shall enjoy the rights and freedoms that are contained in the applicable international instruments or in treaties and conventions that the Union is party to”.

Therefore, we strive to improve our labour conditions out of our own convictions and in fulfilment of our obligations under our own Constitution, in the first place.

This is why, when international organisations express concerns about labour conditions in the UAE, we can neither ignore them nor dismiss them. We are compelled, by our own Constitution, to listen to criticism, when such criticism is constructive, and be prepared to act when it points to factual gaps in our legal and regulatory systems.

I trust that these new decrees, together with the hard work ahead of us to improve our implementation and enforcement capacities, will translate into a qualitative leap in our quest to improve labour conditions in the UAE.When will these decrees enter into effect?

We elected to apply the provisions of these decrees starting on January 1 next year. This will give us time to update our systems and processes to align them with the requirements of the new decrees, on one hand, and time to raise the awareness of stakeholders about the decrees’ contents and implementation modalities.

I have instructed the relevant ministry departments to prepare and implement a wide ranging communication campaign to reach out to the various stakeholders, including briefings to employers, educational seminars for workers together with the distribution of information kits in several languages.

In what way do you think these new decrees will help UAE attract talented, skilled workers and contribute to fulfilling Vision 2021?

Our mandate at MoL is to contribute to the realisation of that part of Vision 2021 that aspires to a national economy that is “competitive and knowledge-based”.

The new decrees contribute to realising this vision in by enhancing the stability and competitiveness of our labour market as a result of more stable and productive labour relations, by attracting skilled workers with the promise of balanced labour relations that allow them to develop and excel, and by leveraging more flexible mobility rules to gradually change the skill mix in our market and empower our businesses to access an expanded pool of skilled workers.

Will there be consultations with governments of countries of origin aimed at cooperating in raising workers’ awareness about their rights and obligations?

Experience has taught us that unilateral policy initiatives in either country of origin or country of destination often fall short of realising their objectives unless there is a common interest and, therefore, willingness to cooperate in their implementation.

Reigning in labour recruitment malpractices, thus reducing if not eliminating costs borne by workers, is a case in point.

Likewise, implementing these new decrees requires close collaboration in many respects. For instance, a more efficient regulation of the contracting process requires that we align our respective systems of contract validation in a manner that serves congruent interests of both parties. Moreover, we will need to coordinate pre-departure and post-arrival awareness programs in order to make certain workers learn, in sufficient detail their rights and obligations.

Such cooperation is already in place in the context of the Abu Dhabi Dialogue consultative process. One of the programs being developed is an integrated worker orientation programme that can be administered in all member countries of origin to workers preparing to deploy to any GCC country.

We are also keen to work with one or more country of origin to align our respective contract validation and registration systems to ensure transparency, recognising that this will contribute immensely to the success of the worker’s employment cycle from that point forward.

Tuesday, November 17, 2015

The embattled World Cup host Qatar is sending contradictory messages as it struggles with demands to improve migrant labor conditions, answer the mounting questions about the integrity of its successful FIFA bi, confront the fall-out of dropping energy prices, and seek to project itself as both a key Western ally and a useful conduit to more militant Islamist forces.

Against the backdrop of denunciations by international labor and human rights groups of Qatar’s labor sponsorship system that puts employees at the mercy of their employers, the museum situates the Gulf state’s labor regime in the context of forced labor.

“Many construction workers in rapidly industrializing parts of the world, especially the Gulf region, are considered to be contractually enslaved,” says one of the museum’s explanatory texts in a section dedicated to modern slavery.

The positioning of Qatari labor conditions as enslavement takes on added significance given that foreigners account for 88% of the Qatari population and 94% of its labor force. It also takes on widespread Qatari opposition to fundamental reform, if not abolishment, of the kafala system driven by a fear that any granting of rights to non-Qataris will ultimately lead to Qataris losing control of their society, culture, and state.

Qatari attitudes towards the World Cup and resulting pressure for labor reform are largely colored by fear, irritation with widespread hostility towards the Gulf state, and attitudes towards globalization that bring with it greater external influences and a need for societal and cultural openness.

If the creation of the museum was intended to spark domestic debate that ultimately could give Sheikh Tamim greater flexibility to reform or end the kafala system and send a message of intent to foreign critics, Qatar’s responses to international criticism have projected a very different image.

Last month, Qatar adopted a new law that was seen by human rights and labor activists as putting a friendly face on an onerous system rather than radically reforming a legal framework that they have dubbed modern slavery.

The International Labor Organization (ILO) , in response to the law, is considering launching an inquiry into abuse of migrant workers in Qatar. Adding insult to injury, Qatar’s main rival in the Gulf, the United Arab Emirates, has adopted the very reforms of its kafala system that Qatar promised since winning the World Cup bid five years ago.

All of this is not to say that Qatar is a lost case but illustrative of the multiple pressures the Gulf state is balancing and has done so poorly. The awarding of the World Cup and the associated criticism of Qatar has however not been wholly without effect even if the Gulf state’s responses are often too little, too late.

Conditions for workers on World Cup-related projects rather than broader infrastructure projects that were planned independent of the tournament have improved dramatically as a result of workers’ standards adopted by several Qatari institutions. Improvements include the 2022 Supreme Committee for Delivery and Legacy but the problem is that those standards have yet to be incorporated in legally binding national law.

The government moreover seems keen to improve material conditions of workers without tinkering fundamentally with onerous aspects of kafala involving restrictions on freedom of movement and travel and the right to change employment. In a bid to demonstrate sincerity, Qatar opened the first phase of a city for 70,000 workers earlier this month, the first of seven such facilities that constitutes a significant improvement on current living and working conditions.

The timing of debate in Qatar about far-reaching labor reform could not be worse. It comes as the country’s social contract in which citizens are offered a cradle-to-grave welfare state buffeted by an absence of income and sales taxes and generous subsidies for energy, utilities, and food in exchange for acceptance of absolute rule is being called into question. Driving the fraying of the social contract are lower global energy prices and the need to rationalize and diversify the country’s economy.

Sheikh Tamim warned earlier this month that the state could no longer “provide for everything.” He bemoaned the fact that subsidies and benefits reduced the “motivation of individuals to take initiatives and be progressive.” Anticipating Qatar’s first budget deficit in 15 years, Sheikh Tamim stressed that the government’s new budget would aim to root out corruption, eliminate wasteful spending, and streamline the country’s bloated bureaucracy.

Senior development and planning official Saleh bin Mohammed Al-Nabit said it was “urgent” for Qatar to gain new sources of revenue through taxation and rationalization of subsidies and government support program.

Qatar’s inability to counter mounting international criticism and questions about the integrity of its World Cup bid also casts a shadow over Sheikh Tamim’s willingness or ability to radically reform labour laws. Already facing a Swiss legal inquiry into its bid and potential questioning by the US Department of Justice, in the latest twist Qatar has been linked to alleged bribery in Germany’s successful bid for the 2006 World Cup.

Critics charge that rather than being transparent about its bid, Qatar is seeking to dominate if not hijack the debate about integrity of sport through its largely state-funded International Center for Sport Security (ICSS). ICSS’s credibility has been called into question by its refusal to investigate or comment on the Qatari bid and the way some of its senior executives were hired.

Qatar did itself no favors by recently hosting and giving a platform to a Saudi Imam Aidh Abdullah Al-Qarni, who glorified Palestinian attacks on Israelis. Critics have accused Qatar of maintaining ties to militants Islamist and jihadists even if those relationships have at times benefited Western nations and offer a needed back channel.

Qatar’s public association with militant Islamist's amounts to one more nail in a coffin at a time when the country’s credibility is in question on multiple fronts. Economics is forcing it to rethink one of the pillars on which the Al-Thani regime is built and widespread international criticism puts many Qataris on the defensive.

Qatar bets on the fact that its natural resource wealth will secure its position in the world. That could prove to be a risky proposition without Qatar doing more than simply signalling intent through gestures like the slavery museum.

Sunday, November 8, 2015

After over a year of anticipation, the government of Qatar last week unveiled its highly touted labor law reforms. While labor rights activists had hoped the reforms might begin to address the widespread abuse of migrant workers and the prevalence of forced labor in Qatar’s massive infrastructure projects, not surprisingly, they fell far short of bringing the labor code in line with international norms. As Qatar is set to host the 2022 World Cup, and 700,000 more migrant workers have been recruited to develop the country at breakneck speed, the lives of thousands of workers could be on the line. As has been widely reported, the labor rights situation in Qatar is dire. Migrants are recruited into the regressive kafala visa system, creating contracts akin to indentured servitude between the migrant workers and their employers. Under the kafala system, workers have no trade-union rights, remain trapped in jobs for which they have likely paid high fees, must receive an exit permit from their employer to leave the country, and have little access to grievance procedures. These conditions make workers particularly vulnerable to conditions of forced labor. In preparation for the World Cup, Qatar, a country of 250,000, has recruited approximately 90% of its workforce, some 1.4 million workers, from abroad. The relentless pressure to develop regardless of the human cost puts working people at risk. Unfortunately, the new labor laws do not abolish the notorious exit permits, and workers still have to get their employers’ permission to leave the country. Workers will supposedly be able to appeal to the Interior Ministry, but most workers live in fear of that ministry. Migrant workers do not have the right to join a union or have a collective voice with elected workplace and representative committees. Domestic workers continue to remain wholly excluded from the labor laws. One nominal improvement gives workers the ability to transfer jobs at the end of a contract; however, employers can still elect to recruit into five-year contracts—hardly a speedy exit from an abusive employer.

Access to the labor camps and millions of workers has become increasingly restricted as the government seeks to cover up its mistreatment of workers. Police presence has increased in industrial areas, and journalists were arrested in May for attempting to report on labor camp conditions. Despite the obstacles, the International Trade Union Confederation has obtained undercover footage and produced a new multimedia investigation that includes interviews of workers in Qatar, scenes from the labor camps and stories of workers who have returned to Nepal. “International companies doing business in Qatar can no longer be lured by Qatar’s promises of reform,” ITUC General Secretary Sharan Burrow said. “The threat to the reputation of international companies … has increased with the government’s sham reforms.”The discrimination, racism and denial of rights in Qatar add up to apartheid and a model of employment centered on forced labor. Superficial changes to the kafala system do not address the restrictions on basic worker rights that lead to such widespread exploitation. Governments, corporations, and major sporting and cultural institutions that continue to do business in Qatar are complicit in the abuse. The international community must express disappointment at this missed opportunity for change and continue to demand real reform, which must include the freedom of movement and the freedom of association.

Monday, November 2, 2015

As expected, the job occasions in the tourism sector of the
Kingdom is to reach about 1.7 million by 2020, according to the Tourism
Information and Reasearch Centre (MAS), the statistical division of the Saudi
Commission for Tourism and National Heritage (SCTNH).

These are the total numbers of jobs in the tourism sector
including both direct and indirect in the labour market and others sectors
associated and profiting from tourism in Kingdom, the latest report by MAS.

The report said that in the tourism sector in 2015 the
number of jobs will increase upto 113,048 and after this there will be more
increment to 129,526 jobs by 2017 due to the execution of a number of hotel
mega-projects acros the Kingdom especially in the two Holy Cities of Makkah and
Madinah and in the capital city Riyadh.

MAS figured thatthe number of direct job opportunities in
the tourism sector until the end of 2014 reached over 795,000 and rised over
840,000 by the end of 2015, while the indirect was about 397,000 by the end of
2014, and expected to exceed 420,000 by the end of 2015.

The total of both jobs was 1,192,285 by the end of 2014, and
rise by the end of 2015 about 1,262,153.

Furthmore, according to the report there would be rapid
growth in investments, as the number of tourism accommodation facilities
reached 3,710 by the end of 2014, with 1,222 hotels and 2,488 furnished
apartments.

As going on with same way, number of hotel rooms in the
Kingdom increased 299,500 and furnished apartments 87,050.

Particularly, currently tourism is the secondmost important economic sector in the
Kingdom, where Saudi has reached 28% and the estimated number of people working
in tourism sector by 2025 is predicted to increase 317,352 compared to 94,249
in 2014.

According to industry experts, the tourism sector is
probable to make actual difference in national economy and occur as the future
alternative to crude oil.

With the increment and decrements of the workers in Saudi Public and Private Sector, let's get to know about working hours of it.

Labour Ministry Said, Saudi Arabia's cabinet has deferred
for further study a decision on limiting the private sector work week to 40
hours, part of proposals designed to push more into private employement.

On Twitter late Thursday, the ministry said, the cabinet had
delayed its decisions as per the feedback from businessmen. I did'nt say when
the decisionn would be made.

As the authorities try to boost the private sector
employement in a time of low oil prices they faced a problem, which draining
state finances andthreaten to slow the
economy.

Public sector have most workers in Saudi, which gives them
benefit of 35 hour work week with big pensions and health benefits too, and
Most private sector jobs are held by 10 million foreign workers.

To decrease the burden on public sector and control the
number of foreign workers, the government has been considering a proposals to
lure more Saudis into private companies by reducing the working week to 40
hours, down from 48 hours in many ways, and increasing weekend to two days from
one.

But most ofthe
business communities has argued that the move would effect the economy by
increasing companies cost, deterring investment and companies forcing for the
shorter week to hire more foreigners.

Thursday, October 22, 2015

Kuwait's fourth oil refinery on stream

Govt's oil policy based on clear visionAFTER waiting for more than ten years and obtaining all necessary approvals, Kuwait has finally signed the contract worth $15 billion for building Al-Zour Refinery by the end of 2019. Finally, another mega oil project has been approved and is on-stream for completion. It is very important that the construction of the new refinery progresses, as it was postponed more than once. Now that it is on, it is a huge indication that Kuwait is serious about completing its outstanding projects and has finally realized it is time to move forward.The new refinery is expected to become fully operational by the end of year 2020 with three local refineries of total capacity exceeding 1.2 million barrels per day after closing down Shuaiba Refinery and turning it into an oil terminalTherefore, the total refining capacity of Kuwait will be close to 2 million barrels inside and outside Kuwait including the refineries in Italy and Vietnam. It is indeed good news for the industry as a whole including the commercial arena, traders and small businesses. We must remember that mega projects lead to smaller projects due to which everyone will have work and the commercial activities will be revived. The cash, which will amount to more than $25 billion after taking into account the other refinery project, should be directed to different commercial projects.

Kuwait plans new terminal as stop-gap for delayed airport expansion

Kuwait's government is to build a new terminal at the country's international airport that can handle 5 million passengers a year, as the Gulf state seeks a short-term solution for rising traffic before a larger expansion project is ready. The new terminal will lift capacity at Kuwait International Airport to 10 million passengers a year, Yousef al-Fouzan, director-general of Kuwait's Directorate General of Civil Aviation, It has tendered the project and has set a deadline of Nov. 3 for bidders to respond. Fouzan said construction would take around 15 months to complete, with the new terminal operational at the start of 2017. The proposed terminal will bridge the gap until a much larger expansion project at the airport is ready - one which will boost capacity to 25 million passengers a year but which has already been hit by delays. Turkey's Limak Holding and local construction firm Kharafi National won the bid in August to build the new terminal at a proposed cost of 1.312 billion dinars ($4.35 billion).

GCC rail will 'spur economic growth'

HE the Minister of Transport Jassim Seif Ahmed al-Sulaiti has stressed that establishment of the GCC railway network will not only facilitate faster movement of people and cargo, but also accelerate the region's economic development. Addressing the concluding session of the 19th annual meeting of GCC transport ministers in Doha yesterday, al-Sulaiti expressed hope that work on the GCC rail network would start without any delay. He said there was "excellent co-ordination" between the states and they were aware of the importance of the ambitious project and how it would benefit each of them. Al-Sulaiti said every GCC member-state has initiated a number of significant moves and this has helped facilitate better co-ordination that will eventually contribute to the establishment of the network. While recalling the developments that have taken place in the region's transport sector over the past few years, including the establishment of better road infrastructure, HE the minister said the sector has received utmost attention from the GCC leaders all along and similar support could be expected in future for further progress. Besides the development of highways and diversification of transport options, all future developments in the sector would contribute to the faster growth of regional economies in the coming years, he said. Referring to steps taken by the member-states since the meeting of GCC transport ministers in 2003, HE al-Sulaiti said the leaderships of each country was well aware of the positive impact the railway network would have on their economies, once completed. Al-Sulaiti said the studies carried out since then have found that the project would be beneficial to the people as well as to the economy of the region. At the 2009 meeting, the leaders agreed to go ahead with their detailed studies, which included - among other issues - the engineering designs and possibility of establishing a GCC railway authority to supervise the entire project. A committee consisting of the transport ministers of the member-states has been assigned to intensify the work as early as possible, incorporating the best international standards, practices and specifications, the minister noted. He also reminded the gathering that the development of maritime transport was equally important as it was in line with the requirements of the region's international trade. The minister said all recommendations of the previous meeting held in Kuwait last year have been deliberated upon and priority areas have been shortlisted. Speaking later, GCC secretary-general Abdullatif bin Rashid al-Zayani said the member-states should do necessary follow-up on the Gulf railway project as it would have a considerable bearing on the economy of the entire region. Kuwait consumer sector remains robust despite mild moderation - NBK Economic ReportKUWAIT: The consumer sector continued to grow more rapidly than the rest of Kuwait's economy despite some slowdown in growth. Household debt growth remained in the double-digits, though it has moderated over the last twelve months. Consumer spending growth also maintained a robust pace, driven by good sentiment and healthy growth in household income. Indeed, employment growth has been improving over the last 12 months, supporting the consumer sector. While overall expatriate employment has been strong, there was some weakening in skilled expat hiring over the last 12 months.Household's debt growth stood at 12.5 percent year-on-year (y/y) in July, mostly unchanged from the pace a year ago. Personal facilities excluding credit for the purchase of securities rose to KD 10.2 billion. Most of the growth has been in installment loans, which largely finance home acquisition. Installment loans grew by 15 percent y/y in July, with the pace picking up slightly from a year ago. This most likely reflects the role strong demand for housing plays in driving household debt growth. Employment among Kuwaiti nationals has been picking up slightly over the last 12 months, providing some additional support to the sector. New hires among Kuwaitis over the 12 months ending in June 2015 are estimated at 21,900 compared to 20,100 a year before.Net employment growth has been mostly steady at around 3 percent y/y.Hiring among skilled expatriates appears to have slowed somewhat over the last 12 months, especially among the more highly skilled. Employed non-Kuwaitis with at least a secondary education rose by 8,600 during the 12 months ending in June 2015, down from 15,000 a year before. The weakness was more notable among those with a university education. By contrast, total expatriate employment in the private sector continued to see strong growth, rising by 7.5 percent y/y, implying robust growth in the unskilled segments.

Kuwait deports 20,000 expats in nine months

Manama: Kuwait has deported 20,000 expatriates in the first nine months of the year for their non-compliance with the residence and labour laws.“Those who were expelled from the country are from various nationalities and included expatriates without jobs or doing odd jobs, beggars and people implicated in the selling of alcoholic beverages, managing flats for suspicious activities or engaging in immoral acts,” security sources told Kuwaiti daily Al Seyassah. “The public order department has pledged a zero-tolerance towards all violations of the law and involvement in illegal or immoral activities.”

Around 7,000 other expatriates, men and women, will be deported as soon as the paper work regarding their situation and their sponsors is completed, the sources added.“They are in the police custody now and their sponsors have been called to pay for their return tickets and settle all pending issues with their employers. They are expected to be deported within days,” the sources added. However, some legal experts said that the security action should not be confined to expatriates staying illegally in the country, but should be extended to include those who traded in visas and exploited the system to take advantage of the situation.“There needs to be strong action to tackle the roots of the problems, and not the results,” they said, quoted by the daily. “Some expatriates have done nothing wrong and they are in fact the victims of their sponsors. Some of them arrived in Kuwait, secure they have a job. However, they were shocked to discover there were no jobs and the companies mentioned in the arrangements before their arrival were fictitious and did not exist. Those who lied and abused the visa system should be brought to justice, particularly that the minister of social affairs and labour has often said there were bogus companies and threatened to name and shame the people behind them,” they said. In July, Minister of Social Affairs and Labor Hind Al Subaih announced the uncovering of 150 companies that did not exist on the ground.The minister said legal measures were being taken against the companies in addition to the 60 other companies discovered earlier.

GCC unemployment rate to increase from 12% to 16% by 2020

Unemployment across the oil exporting countries in the region including the GCC is expected surge as governments are poised to cut spending to cope with rising fiscal deficits, according to the IMF's regional economic outlook. In the GCC, excluding the UAE, more than 2 million nationals are expected to join the workforce by 2020. If private sector job growth were to follow past trends, and public sector employment growth is consistent with the current fiscal projections, more than half a million job market entrants will end up being unemployed, in addition to the 1 million who are already out of work.

"The aggregate GCC unemployment rate would increase from 12 per cent to 16 per cent. Clearly, if more fiscal adjustment were to take place, with some of it in the form of reined-in public sector hiring, unemployment rates would be even higher," said Masoud Ahmad, the IMF's regional director for Middle East and Central Asia. In the non-GCC region, about 8 million people will enter the labour force over the next five years. Under current growth projections, and using historical growth -- employment elasticities, the average unemployment rate would increase from 14 per cent to 15.5 per cent. In practice, the increase could be much higher, because cash-strapped governments will not be able to maintain the pace of public sector hiring. Limited direct employment Clearly, the private sector will have to take over from the public sector as the main source of job creation. However, the expansion of the private sector and the diversification away from oil that are needed to absorb the growing workforce have so far proven elusive. Though some progress has been made, most economies in the region are still deeply dependent on the capital-intensive hydrocarbon sector, which generates limited direct employment. Additionally, the private sector itself is highly reliant on government spending and needs to become self-sustaining through increased competitiveness in other markets including exports. Creating incentives for nationals to move to the private nonhydrocarbon sector, improving skills, and making those skills more relevant to the private sector by improving the quality of education are crucial in this respect.